What is the 'Group Of Seven - G-7'

The Group of Seven (G-7) is a forum of the world's seven most industrialized economies. The G-6 was formed in 1975 and consisted of France, Germany, Italy, Japan, the United States and the United Kingdom; Canada was invited to join the group in 1976 creating the G-7. The group is composed of government leaders from the seven nations who meet to discuss international economic and monetary issues.

BREAKING DOWN 'Group Of Seven - G-7'

The G-7 meets on an annual basis in a rotating member country. France hosted the first meeting in 1975 when French President Valéry Giscard d’Estaing invited the leaders of the Federal Republic of Germany, the United Kingdom, Italy, the United States and Japan to Rambouillet to discuss the crisis triggered by the oil shock of 1973 to 1974. This meeting was among the original G-6 nations. The first meeting with all G-7 nations was held in Puerto Rico in 1976 and was hosted by the United States.

The Presidency of the G-7 is held by each of the member countries in turn. Although the European Union attends the G-7, it does not chair or host the meeting.

Role of G-7

The G-7's major role is to discuss and resolve global problems. The seven nations represent approximately 50 percent of the global economy. The G-7 has been particularly vocal about the need to prevent the overall global economy from entering a recession. The group has discussed financial crises, monetary systems and major world crises such as oil shortages. Finance ministers from the member countries meet annually or more frequently to find ways to improve the economies of member countries and the world.

Expansion to G-8a

In 1998, Russia was added to the G-7 as a full member, making the group of world leaders the G-8. Russia was added shortly after the Cold War in a symbolic but highly contested move. Former U.S. President Bill Clinton was one G-7 member who pushed for Russia to be welcomed into the group.

The acceptance of Russia created the G-8 from 1998 to 2014. In 2014, Russia was suspended from the group after the annexation of Crimea and tensions in Ukraine. The original G-6 included non-communist powers, and the inclusion of Russia was seen as a move to help the post-Soviet Union Russia have a say in world issues.

Diminishing Power and Role

The G-7 has been criticized for not including emerging markets or representing enough of the overall global economy. Occasionally, the G-7 welcomes guest nations as nonmembers. The European Union has participated fully in the G-7 since 1981 as a non-enumerated member.

The G-20, created in 1999, includes all the members of the G-7 plus 12 additional countries. The 20th representative is the European Union. The G-20 includes emerging markets such as China, Brazil, India, Mexico and South Africa. With the membership of emerging markets, the G-20 can better gauge and influence global economic growth.

Canada holds the G-7 Presidency from January 1 to December 31, 2018 and will host the G7 Summit in Charlevoix, Quebec from June 8 to 9, 2018.

RELATED TERMS
  1. Economic Network

    An economic network is a combination of individuals, groups or ...
  2. EAGLES Investing

    EAGLES is an acronym describing the economies of Korea, Indonesia, ...
  3. Group of Five – G5

    Group of Five is a designation that has been used to refer to ...
  4. World Economic Forum

    The World Economic Forum holds a yearly conference in Davos, ...
  5. Seven Day Yield

    Seven day yield is a measure of the annualized yield for a money ...
  6. European Community - EC

    The European Community was one of the three pillars of the European ...
Related Articles
  1. Insights

    G-7, Earnings and Inflation Highlight Busy Week Ahead

    U.S. banks begin the much anticipated Q1 earnings season.
  2. Insights

    Why BRIC Nations Failed to Surpass G7 Economies

    What led the much touted BRIC economies to fail? Here's a sneak peek into the factors that collapsed the prospects of BRIC nations.
  3. Trading

    Fast Friends: Italy Helps Russia Avoid Sanctions

    Italy intervenes to prevent the EU from placing more sanctions on Russia.
  4. Investing

    Emerging Markets: The Parts of Russia's GDP

    Understanding the GDP composition of the world's most expansive country: Russia.
  5. Insights

    How Conflict With Ukraine Can Hurt Russia's Economy (RBL, EEM)

    Tension between Russia and Ukraine threaten to undermine any hope of lifting economic sanctions early.
  6. Investing

    Merrill Lynch's 2017 Asset Performance Outlook

    Bank of America Merrill Lynch has issued its annual global investment strategy report for the year ahead.
  7. Investing

    From Russia With ETF Opportunity

    Russia's economy is emerging from a long recession. These ETFs could benefit.
  8. Investing

    Europeans Grow Frustrated With Russian Sanctions (RSX)

    The French Senate voted last week in favour of a non-binding agreement to urge the government to lift the EU's economic sanctions on Russia
  9. Financial Advisor

    3 Signs the Russian Economy Is Recovering

    Understand what has caused the Russian economy to decline in the past 18 months. Learn about key factors that are helping it recover.
  10. Insights

    Does A Junk Rating Reflect Russia's Fundamentals?

    Moody’s, like other credit rating agencies, has downgraded Russia’s sovereign debt rating to non-investment grade, but does this reflect Russia's economy?
RELATED FAQS
  1. How does the price of oil affect Russia's economy?

    Discover how the price of oil affects the Russian economy. As a net exporter of oil, Russia depends on robust oil prices ... Read Answer >>
  2. What are the typical day-to-day responsibilities of a Chief Operating Officer (COO)?

    Learn how a country's debt crisis affects the world, including how currency values, inflation and output are affected on ... Read Answer >>
  3. What caused Black Monday: The stock market crash of 1987?

    Find out about the factors behind the stock market crash of 1987, also known as Black Monday, when the Dow Jones Industrial ... Read Answer >>
  4. What countries have the largest gold reserves?

    Find out which countries have the largest gold reserve stockpiles, and why governments still feel that it's necessary to ... Read Answer >>
  5. Globalization and International Investment

    Learn how globalization impacts international investment and transforms economies around the world. Understand the implications ... Read Answer >>
Trading Center